Horror Stories from Part D Rollout

[Yagents]

Ok, who was around and selling Part D when it first launched?

Can you please share with us the horror stories / problems that you experienced? I'm trying to get insight into what we could see with the exchanges rolling out. Was it systems related, carrier related, enrollment related, etc?

Insurance leaders detail uncertainty of overhaul - Businessweek

 

[Stephen]

It was the wild wild west, anyone that could fog a mirror was going door to door and getting rich. It took a couple few years for CMS to catch up and figure out what kind of rules to make, but sometimes I think that they have over done it a bit.

 

[Cenla Agent]

It was the wild wild west, anyone that could fog a mirror was going door to door and getting rich. It took a couple few years for CMS to catch up and figure out what kind of rules to make, but sometimes I think that they have over done it a bit.

Door to door for MA and PDP was against the rules even then. I'm sure that didn't stop agents from doing it, however. I heard of some with other companies going door to door in senior apartment complexes. I think they were told by their company to lead with Med Supp, but at that time naturally they would be asked about Part D. One manager with another company told me that they did this.

With regard to marketing, the biggest differences that immediately come to mind between then and now are that you could still telemarket back then, the changes to seminars, and no scope of appointment.

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I worked for Humana at that time, manning a Walmart booth, among other things.

The first headache was getting into the Walmarts in the first place. We were told at first that it would be around August but it didn't end up happening until October. The management at the state level (if not higher) had little clue as to what was going on and kept receiving conflicting reports. Me and another guy basically had nothing to do for 2 months because Humana had nothing to sell in our market since MA enrollments didn't start until 11/15. About all we could do is go to pharmacies, doctors offices and community groups to promote the plans and provide some information about them.

I've probably forgotten some of the headaches, but the biggest horror story that I recall was dual eligibles who had full Medicaid. Their drug coverage switched from Medicaid to Part D. A lot of them didn't know what company they had. If they didn't enroll in a Part D plan by 12/31/05, Medicare would assign them one. But in some cases even if they did enroll, CMS messed it up and had them with a different company. So when it was time for them to get their Rx filled in January, a good many were told that their coverage was no good. This was even though they had the Humana (or whatever) card, etc. Of course, if they enrolled around the end of Dec. (which many did, human nature being what it is) it took them a few weeks to get the card anyway. It seemed like I worked a week after 1/1/06 just trying to clean up that mess. With some members it dragged on for a month or two. But they could submit the claims to the carrier and get reimbursed. But for some duals, they didn't have the $$ to pay up front. I think some of the problem in the beginning had to do with some if not all pharmacies not being able to verify the coverage. This problem wasn't limited to duals, but it hit them the hardest for obvious reasons.

Another headache was Social Security. There was a big push to have the premiums taken out of their SS check as opposed to automatic credit card withdrawals, bank draft (I think) or coupon book (mailing the payment in.) For some people SS worked out fine. For others, it was as long as 5-6 months before it was withdrawn, and then sometimes it would take practically the whole check because they took out the "past due" amounts, which could be considerable if there was a premium for the MA plan. My recollection is that by about April or May, they finally gave up and just sent them coupon books. During this time, some would call and ask why the premium hadn't been deducted. Others would be indignant (feigned or not), claiming they didn't know that the premiums hadn't been deducted. In some cases with the PDP premium, many probably didn't know or forgot about it. But those on fixed incomes know exactly what the check is supposed to be.

That year Humana had a Complete plan which had no coverage gap. I figure they were trying to buy the business, perhaps knowing they would take a loss on that plan in some if not all states. Their premiums on the other plans were the cheapest too. But for 2007 (year 2) the Complete plan was radically changed. I want to say it only covered generics in the gap at that point, and the premium actually went up from something like $68 to $80 per month. I had sold a good many of those to people who had high drug costs, so I had to go back the next year and try to switch most of them to a different plan since the 2007 complete plan was not the best plan for about 95% of my clients who had enrolled in it for the previous year. Some also had a decision to make between the Complete Plan and MAPD since complete wasn't available in a MAPD plan. Those who had high Rx costs ended up going with the Complete Plan even though they might have chosen an MAPD plan otherwise.

Another one was PFFS. (The area I lived at the time had only PFFS and RPPO.) Myself and some clients found out the hard way that certain doctor groups didn't accept it. After that, I tried to sell the RPPO whenever possible.

Another one from the agent side was pay, although in my case at least it wasn't really a problem. (If it ultimately was, I was none the wiser.) In Jan or Feb, Humana said that CMS was having trouble verifying the enrollments. So they basically just estimated what we should be paid based on what we had submitted. They paid something like 90% or 95% of what was submitted. Around the 3rd or 4th quarter of that year (after I had already quit) I got a letter from Humana stating that I had been overpaid by something like $1000. I probably still have the letter somewhere. But they didn't charge it back and just called it even because we had had such a great year or whatever.

They continued to have problems with commission for a year or two afterward. After I went indy, I would occasionally get paid for enrollments that I had done when captive. This would also be at the indy commission rate instead of the captive rate, which was approx. 1/2 of the indy commission. Back then I was green and stupid and didn't save a copy of all of my commission statements from when I was captive. So I had no way of knowing whether or not I had been paid for those enrollments at the time. Some time around 2008, I got paid on something like 10 of these MA enrollments in one month. I can't remember exactly, but I think a few might have been for some members that I didn't even recall enrolling. I called Humana's commissions dept. and inquired about this. The woman said it was legit even though I was 95% sure that it was not. As I suspected, several months later, these were charged back. It was in the ballpark of $2000-$3000.

In the beginning, at least in some areas, Humana made the mistake of working with Parker & Assoc. to staff rural Walmart stores that had little prospect of generating MAPD sales. Some of them would give inquirers very inaccurate information about MA if anyone even showed up at all.

 

[Ann H]

Good information, Cenla agent. Thanks for posting that.

 

[Post Quartermaster]

PDP was a bit of a mess at rollout......our agency staffed 50ish pharmacies in half of our little state. We were repping 2 carriers that year......I spent a couple of days a week "taking orders" - running a quick formulary comp if necessary, then filling out an app with 3 plan choices. Biggest problems aside from getting business issued was the Social Security Deductions for premiums sorted out. I would guess +10% of people had delayed deductions, average 90 days, but saw a few go 12 months or more.

Think of the ramifications for subsidies not getting to carriers on time....could present some interesting cashflow issues in 1Q for exchange carriers......


Moreso than the PDP rollout, the MAPD 1st and 2nd year were very "wild west"....when CIP came out as the 1st SNPs (year round enrollment) part time agents were driving into our state (from states that did not have SNPs) for $400 an app and enrolling almost everyone on the wrong plan. Carriers were sponsoring & paying for seminars.........Cue CMS marketing rules 6 months later..........

 

[insuranceconceptscindy]

I think my biggest issue was getting the "healthy" people to get signed up. They didn't understand that they would be penalized and would risk it. I've had many clients come back to me saying they wished they signed up way back then. For a few, not only did they have PDP penalties, but also High Income "penalties" as well. So their $15 plan is more like $80 or $100. It all came back to bite them.
I'll have to agree with the previous commenters- it was truly the wild wild west. Lots of misinformation and rogue agents looking to make a fast buck. I had a couple clients get screwed over because they didn't want to bother me with a silly question, and then got signed up for an MAPD plan at Walmart, when they wanted info on a PDP.
I think the fall out from that period went a little too far- Not a fan of the SOA- confuses more people than it helps. Why can't I serve coffee, cookies AND fruit at my seminars?
I hope that HHS doesn't use some of the same tactics that CMS is using.

 

[bluediamond]

I'll only say one thing and you can take it from there, CMS was backed up for months and could not get much straight.

 

[Cenla Agent]

I didn't have too many people decline to at least enroll in Part D if I talked to them one on one at any length. Maybe some did who attended seminars that I failed to follow up on adequately.

With regard to the penalty, one case I remember in particular was a call I got about 7pm on 12/30/06. A stubborn old man had refused to enroll the first year. He was on no meds at the time and probably didn't like the government telling him what to do. He had a heart attack or something the next year and was paying about $500 per month for his meds after that. I guess his wife finally convinced him to enroll, which he did on the last possible day. If it hadn't been a Sunday (when I don't work unless absolutely necessary) and been local I probably wouldn't have been able to get to him in time.

 

[DS4]

You have to roll with the punches in the Part D market.
When Part D rolled out in 2006, I had 56 plans in California. Now 27.
One carrier, SierraRx went BK.
Over the years, many of the carriers have been sanctioned by Medicare.
Some carriers gave up and left.
Other carriers got assumed by the bigger fish.
It has been a rocky ride at the least.